Court Gives Business Win Over NLRB in Arbitration Agreement Battle

By Kent Hoover | Philadelphia Business Journal
|  Tuesday, Dec 3, 2013  |  Updated 2:42 PM EDT
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Court Gives Business Win Over NLRB

Borislav Stefanov

A federal appeals court gave businesses a major victory in their efforts to require employees to sign arbitration agreements that prohibit costly class action lawsuits.

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Companies can force employees to sign arbitration agreements that prohibit class action lawsuits, a federal appeals court ruled Tuesday.

The Fifth Circuit U.S. Court of Appeals overturned the National Labor Relations Board, which decided that home builder D.R. Horton Inc. violated its workers' rights by forcing them to agree to resolve all employment-related disputes individually through arbitration. The arbitration agreement prohibited workers from making class action claims against the Fort Worth, Texas-based company.

The NLRB concluded the company's mandatory arbitration agreement violated the National Labor Relations Act because it required employees to waive their right to join together to challenge company decisions. The board also ruled that the agreement would lead employees to believe that they couldn't file unfair labor charges with the NLRB. Read more about this story on PBJ.com

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